What is a life cycle fund?
Life cycle fund is a fund that can automatically adjust the asset allocation ratio according to the risk-return characteristics of investors in each life stage; It can be divided into target date fund and target risk fund.
Life-cycle funds provide diversified professional portfolios through a single and simple investment method to meet the needs of investors at different stages of their lives and achieve their goals.
What is insurance financing?
Insurance is one of the oldest risk management methods. In an insurance contract, the insured pays a fixed amount (premium) to the insurer. The former is guaranteed: within a specified period, the latter will compensate for any loss caused by a specific event or a group of events.
Insurance belongs to the economic category, which reveals the essence and essence of insurance. This is similar to some functions of insurance products, such as endowment insurance, children's education fund insurance and so on.
Insurance is divided into consumer insurance and return insurance. The main guarantee function of consumer insurance, if the subject matter of insurance does not appear, then you will not get any compensation; Return insurance is also commonly known as savings insurance, that is, after the insured has lived for an agreed number of years, the insurance company will return the premium paid or the insurance amount agreed in the contract.
The following is a comparison between life cycle funds and return insurance for investors to choose from.
Liquidation cost: If life changes and cash is needed, the liquidation cost of the two products is different.
For the fund, it mainly involves redemption fees. According to the current domestic situation, the redemption fee of life cycle funds should be around 1% to 1.5%. The realization cost of insurance is the insurance investment minus the policy value. If you surrender early, the cost will be high, but now you can apply for a personal mortgage loan from the bank with the policy, and the cost is the loan interest rate.
Capital preservation: At present, most domestic investors are risk-averse and unwilling to bear investment losses. Life-cycle funds are not capital preservation funds, and fluctuations in the stock market may lead to large fluctuations in the net value of funds, and investors are in danger of losing money. And investment insurance, as long as the premium is paid on time, the yield is generally relatively fixed, of course, the yield is also low.
Investment method: fund investment can choose one-time investment or regular fixed investment; Insurance investment also includes wholesale payment and installment payment. It is also a phased investment, the latter is mandatory and the former is not.
In addition to traditional insurance, the yield of new investment-linked insurance in the market is also related to the stock market, and it is also divided into dividend insurance, universal insurance and investment-linked insurance. Dividend insurance promises customers to enjoy fixed insurance benefits, universal insurance promises to guarantee income, and investment-linked insurance does not promise to guarantee income. Their risk ranking increases in turn, but the greater the risk, the higher the income, and their income may also increase in turn.
Investment-linked insurance is similar to the investment mode of life cycle fund, but its advantage is that if the investor dies unexpectedly or is completely disabled, in addition to the accumulated investment income in the investment account, he can also get full life insurance.
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